As we previously reported here, there have been five lawsuits challenging the U.S. Department of Labor’s new fiduciary rule. (Our Client Alert on the new rule is available here.)
On July 8, 2016, the U.S. Department of Labor (DOL) filed its first formal response to these lawsuits in The National Association for Fixed Annuities v. Thomas E. Perez et al., Case No. 16-cv-1035 (D.D.C.). The DOL’s response comes in the form of an opposition to plaintiffs’ motion for a preliminary injunction and summary judgment and a cross-motion for summary judgment. The DOL argued that the fiduciary rule is entitled to Chevron deference – which requires federal courts to give deference to agency interpretations unless they are shown to be unreasonable – because the rule is necessary to protect millions of retirees in light of the shift from professionally managed defined benefit pension plans to participant-directed defined contribution plans. The DOL also disputed the accusation that the administrative process of issuing the rule was improper. Among other things, the DOL pointed out that it held an open rulemaking process spanning almost six years, which included the receipt of consideration of more than 3,000 comment letters, held public hearings, and conducted more than three dozen meetings with interested parties, and then it “provided a reasoned explanation for its decision.” A hearing on the motions has been scheduled for August 25, 2016.
Three of the other lawsuits were filed in the U.S. District Court for the Northern District of Texas and have been consolidated under Chamber of Commerce of the U.S., et al., v. Perez, et al., Case No. 16-cv-1476-M. The parties are currently briefing cross-motions for summary judgment with opening briefs due July 18. A hearing on cross-motions for summary judgment will be heard on November 17, 2016.
The fifth case is pending in the District of Kansas and is captioned Market Synergy Group, Inc., v U.S. Dept. of Labor, et al., Case No. 16-cv-4083. The DOL’s brief is currently due July 22, and a hearing on the motion for preliminary injunction is scheduled for September 21, 2016.
